Friday, June 24, 2022

ERC20s to Be Better Cryptocurrencies Than Ether, Argues Vlad Zamfir

ERC20s to Be Better Cryptocurrencies Than Ether, Argues Vlad Zamfir

Ethereum developer and top Casper researcher Vlad Zamfir just posited on Twitter that ERC20 tokens, the products of the popular Ethereum-based token standard, will make “far better cryptocurrencies” than ether (ETH). Earnest debate has ensued in the community regarding the as-yet determined implications of Zamfir’s suggestion. 

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Common Misconception?

With the market capitalization and price of ether — the “fuel” of the Ethereum Virtual Machine — hitting new highs as of late, many have conjectured 2018 may be Ethereum’s year to overcome Bitcoin in more ways than one. Alongside this sentiment, some investors are taking ether’s price movement for granted, coming to believe ETH will rise to the sky.

Zamfir’s not into the unhinged “moon” talk

Peruse crypto forums, and common predictions for the ether price by end of year typically range between $3,000 USD and $10,000.

And while these sums would certainly be impressive, Ethereum developer Vlad Zamfir has dashed a bit of cold water on the perception of the need for exorbitant ETH prices going forward. Per his “don’t mind if I burst your pumping bubble” instinct, as Zamfir put it on Twitter, the researcher argued that ERC20 tokens don’t need a network that inherently bears more value than its constituent projects for guaranteeing security.

The contention that started the conversation? “ERC20s will make far better cryptocurrency than ether.”

An Interesting Exchange

Zamfir’s tweeted assertion set off a series of threaded debates and conversations, and one of the more illuminating ones occurred between Zamfir and Twitter user @CallMeGwei

First, the latter asked Zamfir what implications his suggestion had for Ethereum’s security with regard to the project’s shift from proof-of-work (PoW) to proof-of-stake (PoS):

Zamfir replied:

“Not really, no. PoS is more secure than PoW at all the prices. And transaction finality means that no number of Byzantine faults can reverse finalized blocks.”

In response, @CallMeGwei suggested the implications of such a proposed dynamic had their head figuratively spinning:

But Zamfir remained confident, arguing that it’s a “[c]ommon misconception, really. Finality actually allows for much smaller budget for security than assets being traded on the chain.” Such an understanding, if true, turns the perception that Ethereum will always be “larger” than ERC20 projects on its head.

What do you think? Does Zamfir make good points, or is this story a case of him having a soft spot for stirring the pot? Let us know where you stand in the comments below.

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